Argument 1:
The blockade is good for the Latvians
Argument 2:
The blockade is good for SwedenArgument 3: The blockade is good for Swedish construction workers.
Prime Minister Persson, to his credit, hasn’t attempted to pursue the argument that imposing Swedish wages on Latvian labor is for the Latvians’ own good. His argument in favor of the blockade have been more properly mercantilist:

There is a risk that we will have competition through underbidding, which weakens collective bargaining and opens us up to unfettered workforce immigration. This doesn’t just concern construction workers but also, for example, software programmers from India or people receiving health care. It becomes a whole new Sweden.Det finns en risk för att vi kommer att få en underbudskonkurrens som försvagar kollektivavtalen och öppnar för fri arbetskraftsinvandring. Det handlar inte bara om Byggnadarbetare, utan också om till exempel dataprogrammerare från Indien eller folk i vården. Det blir ett helt nytt Sverige.

That was a jaw-dropper of a soundbiteThe quote is a week old, but I’ve been playing catch-up with these posts. for me — I had always assumed the prime minister was a free trader. At least the internal logic is impeccable: There is indeed no difference between trying to keep out Latvian workers and trying to keep out Indian programmers, for the stated reason that they both can provide services more cheaply than Swedes can.

But the prime minister’s mention of software leads to an interesting mental exercise: Indian programmers don’t tend to come to Sweden to provide their services — they sell them from India, say via the internet. In the same way, what if the school the Latvians were building were essentially a prefabricated building, built in Latvia at the same wages they would have asked in Sweden, and then shipped to Sweden? Would this be acceptable to the pro-free trade left-of-center? Or is Sweden justified in imposing tariffs on the import of labor and goods to erase “unfair” competitive advantages? Is Persson seriously suggesting we put quotas on internet purchases of software from Indian companies? It would certainly be an original if kookie way to try to turn the thoughts expressed in his quote into policy.

Byggnad’s motivations for the blockade are understandable in that they are trying to protect the jobs of their members at their current wages. In the short term, such a tactic could well work, at a cost to both Latvia and Sweden as a whole. In the short term.

In the long term, a protected construction industry means that there is less incentive to remain competitive vis-á-vis the rest of the world. And that would be a pity, because Swedish construction workers are currently among the world’s most highly skilled; as are, for example, Swedish software programmers.

The strategy those of you who are Swedish construction workers should pursue, then, is the same as that which Swedish software programmers are successfully pursuing: Exploit your technological advantage over your competitors. This means not competing on price, but delivering products and services that other countries can’t provide at any price.

For Swedish programmers, this means — for a host of reasons — producing some of the world’s best games, or some of the world’s most complex simulators. It means not wasting your talents on the easy stuff, which tends to be commoditized, which the Indians can do just fine, and where the ready supply of available labor depresses wages (though they are excellent by Indian standards).

To Swedish construction workers, schools and houses are relatively simple to build, hence commodities, and these should be left to the Latvians, who are more than capable at this work. Instead, go after the hardest, best-paid building contracts — not just in Sweden, but all over Europe. Bid on contracts for clean rooms in Polish laboratories. Bid on building emergency rooms in Norway. Bid on making skyscrapers in Latvia. And if the Latvians complain, I’ll write another post just like this one defending your right to compete on their turf.

In other words, don’t race to the bottom. Race to the top, where you don’t need legislative crutches to to help prop up wages. And in order to get there, LO and Byggnad should use their considerable funds to ensure that union members are equipped for the task, rather than squandering the money on lobbying activities aimed at maintaining the status quo, an effort that is doomed to fail in the end.

In any case, if the Swedish government’s reaction to foreign competition is to try to prevent it, does this not betray a lack of confidence in Sweden’s ability to take on the world? Wouldn’t it be better if Persson stood on the tarmac in front of SAAB planes in fighter pilot gear, telling the world’s economies to “bring it on” with their free trade? (I just wish!)

No, instead, we get fearmongering. We are told ordinary Swedes should support Byggnad because this is the thin edge of the wedge — there are far more foreigners out there ready to steal far more Swedish jobs. Except that they can’t, in most cases: They’re not qualified. Latvians are not taking my job because they can’t edit English as well as I can. Poles are not taking over the the receptionist’s job because they don’t speak Swedish and English as well as he can. Persson’s floodgates argument is hokumQuestion: Does the relatively low amount of commenting to these three posts by Swedes mean that you on the whole agree with me, or is my post beneath contempt, or are you not all that interested? I for one believe this to be the most important economic debate facing Sweden right now… up until Poland introduces the 15% flat tax a few years hence..

In the end, it’s up to Byggnad’s members to decide their future. If a particular construction worker would prefer to remain in Borås or Åmål and just build average, typical Swedish run-of-the-mill buildings, then the news might not be so good for him — he’ll have to accept lower wages to remain competitive.